House prices have jumped 2.1% higher in the three months to February and are up a dramatic 7.9% on the same period last year according to the latest Halifax House price survey.

The lenders says that activity is on an upward trend. Home sales increased for the ninth successive month in January to 103,440 and were 30% higher than in January 2013.

The number of mortgage approvals for house purchases – a leading indicator of completed house sales – was 11% higher in the three months to January than in the previous three months and 42% higher than in January last year.

“However, continuing pressures on household finances, as earnings fail to keep pace with consumer price inflation, are expected to remain a constraint on the rate of growth of house prices. We are also seeing signs of a revival in house-building, which should help bring supply and demand into better balance and curb upward pressure on prices over the medium and longer terms.”

House prices increased by 2.4% in February. This was the eleventh monthly increase in the past twelve months. The average price is, however, still 10% below the August 2007 peak.

However estate agents have warned about the lack of housing stock. Alex Gosling, managing director, of online estate agents Housesimple.co.uk, says:”There’s only one way prices are moving at the moment and that is upwards. Although renewed consumer confidence and a healthier economic climate are certainly playing their part, in truth it’s an out of kilter demand-supply balance which is having a much greater influence on property prices.

“It’s a case of the buyers are there, but where are the sellers? In London especially, estate agents are lining up 20 plus viewings for many properties and guide prices are being smashed as buyers bid against each other desperate not to miss out for fear that prices may run away from them.

“The property market needs stock and quickly. The problem is that many sellers don’t seem to be in too much of a rush to sell. Certainly in London many homeowners are waiting to see how much further prices will rise before putting their properties on the market.

“However, that’s not necessarily the case outside the capital where homeowners are simply not in a position to sell because they’re still in negative equity. They have little choice than to wait for prices to recover enough to drag them out of that position.”

Oliver Atkinson, director of the online estate agents urbansalesandlettings.co.uk says: “In parts of Britain the momentum is approaching madness, as price rises continue to accelerate. February’s 2.4% monthly jump in average house prices was the largest for more than a year, and annual price growth is now at the dizzying levels not seen since before the crash.

“The 7.9% year-on-year surge in the national average is all the more striking when you remember that in large parts of the country, house price growth was modest for the first half of 2013. Now the extraordinary growth seen in the South East hotspot is gradually rippling outwards.

“But how much further can the market continue to rise? All the signs are there is some way to go yet. Supply is struggling to keep up with demand, even if levels of new housebuilding have drastically improved.

“If lending criteria remain as they are, and the economy continues to improve, there is no reason to suspect prices won’t keep on rising during 2014.

“It’s now five years since the base rate was cut to its current rock bottom level, and the inevitable rise in interest rates will dampen demand but this is unlikely to come before 2015. That’s more likely to be the year when prices begin to plateau.”